Ayala Land to launch 15 to 20 additional residential projects
PROPERTY GIANT Ayala Land, Inc. will launch as much as 20 more residential projects until the end of the year amid a rebound in the property sector, an executive said late last week.
The new projects will allow the listed firm to complete the targeted launching of 9,200 residential units worth P40 billion for the year. “We are on target for the full-year [product launches] … we continue to see strength in the market and evaluate different scenarios and see something which we can even ramp up,” Alfonso Javier D. Reyes, head of investor relations at Ayala Land, told reporters.
“[There will be] another 15 to 20 [residential project launches] … Given the environment we are seeing, we do not expect to be launching less [than that],” he added.
Ayala Land operates under four major brands — Ayala Land Premier for the high-end segment, Alveo Land for the middle-income segment, Avida for the “affordable” market, and Amaia for “economic housing” projects. The property firm has already launched 47% of this year’s target for residential units.
Mr. Reyes said residential sales accounted for half of total revenues in the first three months of 2010. In its financial report late last week, Ayala Land said residential revenues grew by 41% to P4.41 billion in the first quarter, resulting in a 24% rise in consolidated revenues to P9.22 billion. “That is where we are seeing growth,” Mr. Reyes said.
Strong revenues from residential and commercial businesses boosted the property giant’s core net income by a third to P1.2 billion in the first quarter. “We hope to continue with that positive earnings trajectory,” Mr. Reyes said.
Mr. Reyes said the bulk of the P27-billion capital expenditures this year would be spent in the second and third quarters.
Given the strong demand, overseas sales have also shown growth. Sales from overseas Filipinos have so far hit P1.2 billion, up from P950 million in the fourth quarter of last year, he said.
Furthermore, the company is launching another 120,000 to 130,000 square meters of new business process outsourcing space, mostly in five provincial locations.
The company is looking at setting up a real estate investment trust (REIT) to secure a minimum of $300 million from investors.
In December, the REIT bill, which will allow companies to use pooled capital of investors to buy and manage income-generating property and mortgages, lapsed into law. “At this point we are leaning in the direction of a commercial REIT, which will probably include both shopping center assets and some office assets,” Mr. Reyes said.
Shares in Ayala Land, whose profits dropped by 16% last year to P4.04 billion, shed P0.50 to close at P13.00 apiece on Friday.
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